Mechanism And Empirical Research On The Impact Of Cross Border Capital Flow On Commercial Banking Stability Of China

The strength of our capital openness and international capital operations has intensified as the renminbi continues to internationalize with "The Belt and Road" and"Free Trade Zone" strategy.The flow of cross-border funds will often be more frequent,and the range of volatility will also be amplified by various factors.Commercial banks,the most important financial institutions in our financial markets,are the main counterparties of international capital operations.It is also an important concentration of international capital,between interests and risks.However,historical experience tells us that the premise that financial markets and countries in financial openness benefiting from system liberalization earnings are a precondition for financial stability.As a result,under increasingly open capital,explore how to balance pushing international capital operations and risk controls on cross-border flows of capital not only are business banks going to have to be vigilant,but the theoretical and financial authorities urgently need to study and solve issues.This article is based on massive literature and related theoretical support.Fist,describe the status quo and features of current flow of cross-border funds from multilateral views,and analysis the factors affecting our cross-border flows of capital.Secondly there are three ways of discussing the destabilizing effects of cross-border funding flows on the stability of our commercial banking system,the past impact mechanism,the middle transmission and the later contagion mechanism.Than create a linear regression model about commercial banking stability,cross-border flows of liquidity and macro-economic variables to examine the impact of different cross-border flow of capital on our commercial banking stability.And use VAR model to examine the impact of cross-border flows of capital on our commercial banking stability from different ways.The empirical results suggest that cross-border flows will lower the stability of our commercial bank,and other investment differences are the main way to reduce stability;increase in foreign debt and exchange reserves,revaluation of the RMB and interest rate increase are conducive to improving commercial banking stability;But the cyclical cycle of macroeconomic growth through commercial bank credit and regulation mechanism reduces the stability of commercial banking;Long-term flows of capital are relatively smooth and destabilizing to commercial banking stability slightly;Short-term flows will affect commercial banks from three different ways in the above.Finally,based on theory and empirical analysis,put forward relevant count measures and suggestions to prevent cross-border flows affecting the stability of our commercial banks from commercial banks and macro-prudential angles.